JULY 1, 1996

Ligier and Prost

THERE were renewed rumors last weekend at Magny-Cours suggesting that Alain Prost has bought the Ligier team from Flavio Briatore and intends to turn it into the much-vaunted French national racing team. The Frenchman currently works for McLaren but is believed to have to make a decision as to whether to stay with Ron Dennis's team before the end of July.

There is no question that Briatore is under pressure sell Ligier back to French investors. He does not seem to mind if the price is right but it seems that the French want to get the team at a knock-down price. It is virtually certain that Prost will not be sinking much of his own money into the team but would prefer to have other people fund it for him. When he tried to buy Ligier in 1993 the deal fell through because he could not get the commitment of the big French sponsors and a French engine builder.

There are some in the F1 paddock who believe that the recent pullout by Renault and Elf do not make sense and that they may be merely a smokescreen to allow Prost to get both deals in 1998. This is possible but it seems that the financial situations of both Renault and Elf and the current state of the French economy will make life very difficult for Alain.

At the same time there is no great interest for Briatore to hold on to Ligier as it has become increasingly difficult to fund this year. When Guy Ligier was still in control the team enjoyed favored status with the socialist government. State-owned companies Loto, Elf and Gitanes were ordered to sponsor the team. The new government under Jacques Chirac did away with all that and sponsorship negotiations between the French and Briatore were not very successful. Loto withdrew completely, Gauloises reduced its involvement by around 40% and Elf cut back to a tiny percentage of the original budget. With Elf now pulling out Ligier is in even deeper trouble. The team's budget was nearly halved and with Mugen Honda engines costing around $6m a year and the high value of the French Franc disrupting business even more, Ligier took on Brazilian pay-driver Pedro Diniz for a rumored $10m.

There were strong suggestions in the Magny-Cours paddock that Ligier has recently reached agreement to continue with Mugen Honda engines again in 1997. If true the team will have to pay up again. They can keep Diniz - for another $10m - but Briatore will need more money. The Gauloises deal brings with it demands for French drivers which make finding external sponsorships more difficult.

Briatore has enough troubles at the moment trying to get Benetton under control to have the time to worry about what is going to happen at Ligier.

We believe, therefore, that Flavio is looking to sell and that there are serious talks going on at the moment - but whether or not they will result in a Prost takeover remains to be seen.